Which Amortization Method Generally Results in the Greatest Amortization Expense

question 84

Multiple Choice

Which amortization method generally results in the greatest amortization expense in the first full year of an asset's life?

• A)straight-line
• B)units-of-production
• C)double-declining-balance
• D)either straight-line or double-declining-balance

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Definitions:

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of a good or service varies as production increases.

Average Variable Cost Curve

A graphical representation showing how the average variable cost changes as the quantity of output is increased.

Firm

An organization that produces goods or services for sale, operating with the aim of making a profit.

Variable Costs

Costs that change in proportion to the level of production or sales volume.